Aso says no intervention needed on Yen at current levels

Asia Market Update: Aso says no intervention needed on Yen at current levels

Headlines/EconomicData

General Trend: Asian equities generally track US gains amid holidays in China, Taiwan, South Korea and Vietnam

- Hang Seng gains 1.8% in shortened session

- Banks in Japan outperform after gains in S&P500 Financials sector and rise in Treasury yields

- With the Shanghai markets closed, China equity futures gain in Singapore

- Nasdaq and S&P500 Futures rise

- US dollar (USD) trades broadly weaker in Asia, in the aftermath of the US inflation and retail sales data

- USD/JPY declines: Japan Fin Min Aso said Yen strength is not abrupt enough to intervene

- Japan Dec Core Machinery Orders see largest m/m decline since May 2014 (follows recent weaker than expected prelim Q4 GDP)

- New Zealand sells 2025 bonds at higher yield and lower bid to cover

- In Jan, Australia adds jobs for a record 16th straight month, but full-time employment declines

- Indonesia reports second straight monthly trade deficit

- Australia's largest gold miner Newcrest reports declines in H1 profits and revenues amid impact of seismic event at Cadia operations and decline in gold/copper sales volumes.

- US 10-year Treasury yield extends gains in Asian trading, hits 4-year high

Japan

-Nikkei 225 opened +1.1%; closed +1.5%

- TOPIX Electronic Devices Index +1.9%, Securities +1.8%, Iron &Steel +1.5%, Real Estate +1%

- Financials track outperformance seen during US session, Japanese mega banks gain more than 1%

- Japan Display [6740.JP]: Declines over 4% after 9M net loss widened

- (JP) JAPAN DEC CORE MACHINE ORDERS M/M: -11.9% V -2.0%E; Y/Y: -5.0% (largest fall since June 2017) V +1.8%E

- (JP) Japan Fin Min Aso: Yen (JPY) strength NOT strong enough to require intervention: No comment on yen level - parliament

-(JP) Japan Govt to urge companies to adopt a more transparent decision-making process through measures such as allocating at least one-third of board seats to outsiders - Nikkei

-(JP) Japan Ruling Coalition Partner Yamaguchi: No word from PM Abe on BOJ Gvo nominee

-(JP) Japan MoF sells ¥4.4T in 3-month bonds; avg yield -0.1607%

-(JP) JAPAN DEC FINAL INDUSTRIAL PRODUCTION M/M: 2.9% V 2.7% PRELIM; Y/Y: 4.4% V 4.2% PRELIM, Capacity Utilization m/m: 2.8% v 0.0% prior

Korea

-Kospi closed

- (KR) South Korea President Moon coming under some criticism for slow regulatory reform, in light of his repeated pledges to push for drastic deregulation - Korean press

-Lotte, LOTZ.KR Chairman Shin Dong-bin jail term will reigniting a succession battlebetween Shin and his older brother, Shin Dong-joo - Korean press

China/Hong Kong

-Hang Seng opened +1.5%, Shanghai Composite closed for holiday

- Hang Seng Materials Index +3.3%, Info Tech +2.9%, Energy +2.7%, Financials +2.3%,Property/Construction +1.7%

- (CN) China cuts manufacturer subsidies for many electric cars and plug-in hybrids by ~30%, with the centralgovt planning to re-evaluate this aid again around mid-year - press

- (CN) China Ambassador to US Tiankai: It's dangerous to advocate for confrontation against China - financial press

Australia/New Zealand

-ASX 200 opened +0.6%; closed %

- ASX 200 Materials Index +2.1%, Energy +1.9%, Utilities+1.2%, Telecom +1.2%, Financials +0.7%; REIT -0.1%

- Origin Energy [ORG.AU] rises over 6% after raising guidance

- Telstra [TLS.AU] gains over 1% after reporting in line H1 earnings

- (NZ) New Zealand Rev Min:To extend test on residential sales (bright line test) to 5 years

-(AU) Australia Jan Consumer Inflation Expectation: 3.6% v 3.7% prior

-(AU) AUSTRALIA JAN EMPLOYMENT CHANGE: +16K V +15.0KE (16TH CONSECUTIVE MONTHLY GAIN); UNEMPLOYMENT RATE: 5.5% V 5.5%E

-(AU) Australia Jan RBA Govt FX Transactions (A$): -634M v -1.36B prior

-(NZ) New Zealand sells NZ$200M in 2.75% 2025 bonds; avg yield 2.7719%; bid to cover 2.78x

FCG.NZ Raises 12-month forecast auction volumes by 2.0K MT

-(NZ) Fitch affirms New Zealand Sovereign Rating at AA; Outlook Stable

Looking ahead: RBA Gov Lowe expected to speak on Friday’s session (follows his remarks on Feb 8th)

Other Asia

- (SG) Singapore Jan Non-OilDomestic Exports M/M: -0.3% v 4.2%e; Y/Y: +13.0% v 8.9%e; Electronic ExportsY/Y: -3.9% v -5.3% prior

North America

- US equity markets ended higher: Dow +1%, S&P500 +1.3%, Nasdaq +1.9%, Russell 2000+1.8%

- S&P500 Financials +2.4%, Technology +1.8%

- (US) Treasury Sec Mnuchin: reiterates he expects wage growth in the US this year

- (US) Pres Trump reportedly supports a 25-cent gas tax hike to pay for infrastructure - Axios

- (US) DOE CRUDE: +1.8M V +3ME

Europe

- (DE) Bundesbank study says about 90% of euro (EUR) bank notes issued in Germany are never used for payments, but instead hoarded – FT

- (DE) German Chancellor Merkel: will make sure Germany maintains a balanced budget; CDU Party remains opposed to debt mutualization in the Euro Zone

-(GR) Greece Deputy PM Dragasakis: Greece wants a closer relationship with China, it is also keen to build stronger ties with Japan, India and other Asian countries - press

 

Levels as of 01:00ET

- Nikkei225 +1.5%, Hang Seng +1.8%; Shanghai Composite closed; ASX200 +1.2%, Kospi closed

- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%,Dax +0.4%; FTSE100 +0.2%

- EUR 1.2473-1.2448; JPY107.01-106.30; AUD 0.7946-0.7905;NZD 0.7395-0.7363

- Apr Gold -0.1% at $1,357/oz; Mar Crude Oil +1.3% at $61.41/brl; Mar Copper +0.3% at $3.24/lb